Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Floor And Decor (NYSE:FND) and the best and worst performers in the home furnishing and improvement retail industry.
Home furnishing and improvement retailers understand that ‘home is where the heart is’ but that a home is only right when it’s in livable condition and furnished just right. These stores therefore focus on providing what is needed for both the upkeep of a house as well as what is desired for the aesthetics of a home. Decades ago, it was thought that furniture and home improvement would resist e-commerce because of the logistical challenges of shipping a sofa or lawn mower, but now you can buy both online; so just like other retailers, these stores need to adapt to new realities and consumer behaviors.
The 7 home furnishing and improvement retail stocks we track reported a mixed Q2. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7.5% since the latest earnings results.
Floor And Decor (NYSE:FND)
Operating large, warehouse-style stores, Floor & Decor (NYSE:FND) is a specialty retailer that specializes in hard flooring surfaces for the home such as tiles, hardwood, stone, and laminates.
Floor And Decor reported revenues of $1.21 billion, up 7.1% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with an impressive beat of analysts’ gross margin estimates but full-year revenue guidance meeting analysts’ expectations.
Tom Taylor, Chief Executive Officer, stated, “We are pleased to report that for the second quarter of fiscal 2025, our diluted earnings per share increased by 11.5% to $0.58, compared to $0.52 in the same period last year, reaching the high end of our expectations. Our second quarter comparable store sales increased by 0.4%, marking the first quarterly increase since the fourth quarter of fiscal 2022. We believe our second quarter earnings performance clearly reflects the disciplined execution of our agile growth strategies and the prudent management of expenses and profitability by our associates.”
Unsurprisingly, the stock is down 7.2% since reporting and currently trades at $71.21.
Is now the time to buy Floor And Decor? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q2: Arhaus (NASDAQ:ARHS)
With an aesthetic that features natural materials such as reclaimed wood, Arhaus (NASDAQ:ARHS) is a high-end furniture retailer that sells everything from sofas to rugs to bookcases.
Arhaus reported revenues of $358.4 million, up 15.7% year on year, outperforming analysts’ expectations by 7.4%. The business had an exceptional quarter with EBITDA guidance for next quarter exceeding analysts’ expectations and a beat of analysts’ EPS estimates.
Arhaus pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 5.8% since reporting. It currently trades at $10.45.
Is now the time to buy Arhaus? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: Sleep Number (NASDAQ:SNBR)
Known for mattresses that can be adjusted with regards to firmness, Sleep Number (NASDAQ:SNBR) manufactures and sells its own brand of bedding products such as mattresses, bed frames, and pillows.
Sleep Number reported revenues of $327.9 million, down 19.7% year on year, falling short of analysts’ expectations by 8.3%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue and EPS estimates.
Sleep Number delivered the highest full-year guidance raise but had the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 18.6% since the results and currently trades at $6.64.
Read our full analysis of Sleep Number’s results here.
Lowe's (NYSE:LOW)
Founded in North Carolina as Lowe's North Wilkesboro Hardware, the company is a home improvement retailer that sells everything from paint to tools to building materials.
Lowe's reported revenues of $23.96 billion, up 1.6% year on year. This result was in line with analysts’ expectations. Zooming out, it was a mixed quarter as it also recorded a narrow beat of analysts’ gross margin estimates but revenue in line with analysts’ estimates.
The stock is down 4.9% since reporting and currently trades at $243.88.
Read our full, actionable report on Lowe's here, it’s free for active Edge members.
Home Depot (NYSE:HD)
Founded and headquartered in Atlanta, Georgia, Home Depot (NYSE:HD) is a home improvement retailer that sells everything from tools to building materials to appliances.
Home Depot reported revenues of $45.28 billion, up 4.9% year on year. This print met analysts’ expectations. Zooming out, it was a slower quarter as it produced a miss of analysts’ EBITDA estimates and EPS in line with analysts’ estimates.
The stock is down 1.4% since reporting and currently trades at $389.
Read our full, actionable report on Home Depot here, it’s free for active Edge members.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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